This article first appeared on GuruFocus .
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Net Sales:SEK22.4 billion, representing an organic growth of 2%.
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Adjusted Operating Margin:Improved to 12.3% despite FX headwinds.
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Industrial Business Organic Growth:Just shy of 4%.
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Automotive Business:Negative growth, primarily in Americas and EMEA.
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Cash Flow from Operating Activities:SEK1.8 billion, impacted by one-off costs.
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One-off Costs (IACs):SEK755 million, including SEK362 million for Automotive separation.
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Net Debt:SEK14.5 billion; excluding pensions, SEK7.5 billion.
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Adjusted Return on Capital Employed (ROCE):14%.
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CapEx Guidance for Full Year:Reduced from SEK4.5 billion to SEK4 billion.
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Currency Impact on Operating Profit:Estimated at minus SEK650 million for Q4.
Release Date: October 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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SKF AB ( SKFRY ) reported a return to organic growth after eight consecutive quarters of negative growth, primarily driven by the Industrial business.
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The company improved its adjusted operating margin to 12.3% despite challenging market conditions and significant FX headwinds.
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Progress is being made on strategic initiatives, including the high-paced Automotive separation and Industrial right-sizing, which are expected to yield significant benefits in 2026 and 2027.
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SKF AB ( SKFRY ) inaugurated a new global Super-precision bearing center in Italy, enhancing capabilities in robotics, advanced machine tools, and compressors.
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The company is effectively managing tariff impacts through price adjustments and cost control, maintaining resilience in earnings.
Negative Points
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The Automotive business remains in negative growth territory, particularly impacted by weak demand in the Americas and Europe.
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Significant FX headwinds negatively impacted sales by 6.9 percentage points and the adjusted operating margin by 1 percentage point.
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Cash flow from operating activities was lower than the same quarter last year, primarily due to higher items affecting comparability related to the Automotive separation.
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The global economic environment remains uncertain, with market demand expected to remain similar in Q4 as in Q3.
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The company faces ongoing challenges with tariffs and geopolitical uncertainties, which continue to impact global demand and market conditions.
Q & A Highlights
Q: Can you unpack the North America performance, particularly the US, and separate the tariff price increases from any underlying improvement? A: Rickard Gustafson, President and CEO, explained that the growth in the Americas is driven by price mix, and they are still in negative volume territory. Specific numbers for volume versus price mix were not disclosed.
Q: Regarding the Q4 guidance, are you expecting a sequential deceleration in organic growth? A: Susanne Larsson, CFO, clarified that they do not see a significant change in the market environment from Q3 to Q4. The guidance for flat organic sales considers the strong performance in Q4 last year.
Q: Is the currency impact significantly affecting the profitability of the Automotive segment, and is it sufficient for the company to be standalone? A: Rickard Gustafson stated that despite the volatile environment, they are confident in creating a solid and profitable Automotive business. More details will be shared at the upcoming Capital Markets Day.
Q: Could you provide more details on the tariff impacts, specifically Section 232, and how it affects costs? A: Susanne Larsson mentioned that they anticipate compensating for the majority of tariff impacts, including Section 232, through pricing strategies and cost management.
Q: Can you give more color on the planned listing of your Indian asset? A: Rickard Gustafson noted that the separation of the Indian business is complete, and they are ready to list the new entity on the Indian Stock Exchange by year-end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
